GASOLINE TAX AMENDMENT ACT (CONTINUED)

ANSWERS TO QUESTIONS ON NOTICE PAPER

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The House resumed at 8 p.m.

GASOLINE TAX AMENDMENT ACT (CONTINUED)

Resuming the debate on the motion for second reading of Bill 72, An Act to amend the Gasoline Tax Act, 1973.

Mr. Elston: Mr. Speaker, after that long recess, I do not know exactly where I was. Perhaps I should start at the beginning.

To recap, I was expressing my concern for the wellbeing of the constituents of my riding, particularly in the fields of tourism and industry where we suffer from the problem of being away from the main lines of communications in terms of transportation. We have difficulty connecting with rail lines that provide the bulk transit of goods which makes it efficient to market our products. This takes away from those industries the competitive advantage needed to compete with other industries in other provinces.

I was speaking particularly about the door factories that market wood and steel doors for the housing industry in Alberta. I was indicating to the honourable members that, once we remove that competitive advantage, it means a great disservice is being done to the people of my riding with respect to keeping the employment in those industries at peak capacity.

I want to move on to a new area. I am concerned with the impact of the gasoline tax on the municipalities in the riding I come from. In many ways they operate on grants from the provincial government and rely on them to make up the deficit in some areas where they cannot afford the level of taxation to provide the services they require to make the area liveable for their residents.

I note that my riding of Huron-Bruce suffers from one particular problem; that is, we are residents of the snow belt of the province, and we have enormous amounts of precipitation in the winter months. This requires a massive amount of expenditure of time and money to keep the chain of transportation open.

As members may know from visiting our area, we have difficulty keeping Highway 21, the major highway along the lake, passable in the wintertime. We also have the difficulty of making sure the residents of the townships are able to make their way to the various urbanized centres to do their shopping in the winter.

Because of the increased cost for the gasoline required to fuel the vehicles which keep those roads open and because there is an increased cost for the diesel fuel used in the graders and the various trucks with snowplough apparatus, the cost to the municipality as a result of this gasoline tax is going to spiral extremely quickly.

When it comes to budgeting for those expenditures in the winter months in our area, a certain amount of leeway is required so they do not underestimate the costs of dealing with the snow problem. We cannot always predict what amount of precipitation will fall in our area. Some winters we suffer extreme amounts of snowfall. In others, we suffer from less than the usual amount.

In any case, we end up having to spend enormous amounts for standby and for the days when we have those ploughs on the road to keep our area open for public transportation.

I am sure that the member for Cochrane North (Mr. Piché) will be quite familiar with the difficulties of keeping the lines of communication open in those areas where the snow --

Mr. Foulds: Both verbal and otherwise.

Mr. Elston: Oh, obviously. However, the ad valorem tax means a difficulty will arise for those municipalities that are already strapped to predict the amount of money they will need to spend to keep those lines of communication open for transportation, because they can no longer predict exactly when the increases in the tax will actually occur as well.

It seems to me that, in terms of making it easier for those municipalities to predict their expenses and to deal with the problem of municipal funding, rather than having the ad valorem tax with which we are now provided, we should have a certain tax installed in each section so we can allow our municipal officials to deal with the problem and predict what taxes they will need to raise.

It seems to me that the municipalities of this province are saddled enough with having to raise the excess funds that are no longer forthcoming from the province.

I have noted with some concern in the estimates of the Solicitor General (Mr. McMurtry), two or three times in relation to policing, the difficulties that nonregional municipalities are having vis-à-vis regional municipalities when it comes to the funding position in the policing end of their mandate. With this type of tax, we are again saddling those nonregional municipalities with an extra difficulty they no longer require.

When we couple that difficulty in predicting the budget requirements for a municipality with the problem of increased taxes required for education, for the licensing of vehicles and for the paying of Ontario health insurance plan charges by municipalities that fund, at least in part, their employees' OHIP costs, it seems to me we are putting those particular municipalities at another disadvantage that is going to throw them into a grave difficulty when it comes to meeting their requirements.

If I may be permitted an observation, it seems to me that those particular types of policies are going to cause the municipalities more than just a passing difficulty. The province, in providing the funds for the municipalities, has been cutting back in every area in which it has a mandate to provide services.

When they throw that burden on to the municipalities, they are going to cause forever a rift between the people who elect the municipal officials and the officials themselves. I say that because one of the bright spots of this province has always been that the local municipal officials have always been very close to those people they represent. They have always been able to make decisions that are designed to meet the needs of the people in their various areas.

I can see, because of this tax and because of other matters I have raised, that they are going to be left in a situation where they must guess exactly what they must provide for their various residents.

I find that a very incredible sort of circumstance in which to place our local municipal officials, especially in an area that has been built largely upon the basis of government by representation for the people.

I find that takes away very many of the initiatives which the local government has always had in Ontario to meet the needs of their local people, because no longer do we have those definite types of requirements for which our municipal governments can plan.

Mr. McLean: Sure we have. We have lots of them.

The Deputy Speaker: I remind honourable members that we are listening to a very interesting aspect of this debate, and I would like you to keep your personal conversations to a minimum.

8:10 p.m.

Mr. Elston: Thank you, Mr. Speaker. It seems to me that the municipalities are being placed at a very great disadvantage in relation to the many problems that have surfaced as a result of the bills being placed before the House, but in particular with respect to the gasoline tax bill.

If I may now pass on to another particular matter, I wish to deal with agriculture. In the area of Huron county, of which I have half in my riding, and Bruce county, of which I likewise have about half in my riding, agriculture is one of the major industries, and the gasoline tax is going to cause difficulties for farmers as well.

The agricultural industry, like any other manufacturing industry, is reliant upon trucks and automobiles as the mode of transportation for many farm products. They are required to carry out the mandate of production of food for Ontario, indeed for Canada and, even further than that, as an export commodity for the various markets of the world.

Even though there may be situations where the gas tax may have less impact on individual farmers, I find in dealing with farmers buying goods to use in their production schemes that they will sell as much as, or more than, any other industry in Ontario.

It seems to me that adding increased transportation costs like this to the farming industry will end up adding to the cost the farmers must bear. The farmers are unable to pass on this cost to their consumers in any way, in the light of the fact that their markets are not always as predictable and manageable as some members would like them to be.

If I might give an example of what I am saying, I would like to point out the situation where a farmer requires a part for his agricultural machinery. He may have to send as far away as Iowa or Illinois, or maybe, if he is lucky, he can get it from Brantford, where there has been some assistance. In any event, he must pay the charges of importing that commodity into my riding.

He pays the cost of getting it up there, and on top of that he pays the cost of having it installed. What really ends up happening is that he has an increased cost that he is not able to meet because of other high input costs.

Mr. McLean: He could install it himself.

Mr. Elston: He could install it himself, but the problem is that, whether he installs it himself or not, he is also going to have to pay the cost of having it brought from whatever market agency he buys it all the way to his particular area.

Adding that cost to the problem of high input costs that he already suffers, and many other aspects, that man is actually being condemned to a situation of bankruptcy, from which he cannot escape, unless there is some clearing up of the market situation.

The Deputy Speaker: Are you talking about the bill?

Mr. Pollock: Did you ever farm?

Mr. Elston: I have farmed, yes. And I have been talking about the bill.

It seems to me, no matter which way we cut it, the agricultural industry of this province, along with the agricultural industry right across Canada, has always had difficulties in dealing with high transportation costs.

What I am indicating is that the government, by adding this ad valorem tax, is compounding the problem of transportation costs, which the farmers of this province, particularly at this time, cannot afford to meet.

The government is adding to the spiral of those costs at a time when we are least able to have our people bear those costs. That flies in the face of what our Minister of Agriculture and Food (Mr. Henderson) says about his great concern for the farmer. If he were really being faithful to the farmers, he would protest the imposition of this ad valorem tax on gasoline and diesel fuels to such an extent that it is going to cause difficulties.

Mr. McLean: About 95 per cent of the fuel the farmer uses is diesel.

Mr. Elston: The member mentions the high amount of diesel fuel required by the farm industry. If he will check the bill, he will see the tax is put on diesel fuel as well.

The Deputy Speaker: I remind the honourable member that this is not question period. Continue with the debate.

Mr. Elston: Mr. Speaker, I apologize for getting off the track a slight bit, but there apparently are misconceptions held by members on the other side.

It seems to me when they speak of the high cost of diesel fuel as it relates to the farm industry they must realize a great number of the trucks are fuelled by diesel energy. The farmers will have to bear the cost of increased tax on diesel fuels just as well as everyone else in the province.

It seems to me we have a duty to point this out not only to members on this side of the House but also to those who are unable to speak up on the other side of the House as well. That is the only reason I digressed momentarily to speak to that point.

In case the members across the way do not believe the point I raised earlier about the increased costs of the ad valorem tax in relation to municipal expenses, I have a few numbers that may be meaningful. I will not bore them. I earlier thanked the leader of the third party for providing us with a great number of statistics on this matter.

But in reading a number of the comments from various municipalities, I noted that Hamilton indicated its costs were going to rise by a predicted 22.7 per cent. This was from an article I read in the Hamilton paper. As I understand it, it is based on an average year rather than any particularly difficult one that is not generally anticipated.

What that means for Hamilton alone is an increased cost of $22,500 estimated by the officials of that fair city. It seems to me if there is that type of cost in an area where snow is generally not a problem, the difficulties can be compounded in municipalities such as those in my riding where we reside in what is called the snow belt of the province.

Mr. Watson: You're snowed under most of the time.

Mr. Elston: It seems to me some honourable members have never had the opportunity of visiting our fair riding. They mention it being snowed under most of the time.

Mr. Kerr: You're always snowed in. We can't get there. You're really in the boondocks.

The Deputy Speaker: Wait a minute. Keep to the principle of the bill.

Mr. Elston: I am, Mr. Speaker. I am asking that each one of these honourable members visit our riding. But the ad valorem tax is going to make our part of the province almost inaccessible for the ordinary citizen, and without the increase in pay that has been anticipated travel there will be almost impossible for these honourable members. They will never be able to sample the fine recreational facilities we have.

I know at least one member opposite who in years past has been able to afford the luxury of visiting our fair riding. He has enjoyed that area. I invite him back, and any others if they can afford to pay that extra gasoline cost. There is no difficulty; we will provide the facilities.

8:20 p.m.

That reminds me, we have a fine ceremony planned for Thursday evening when my predecessor as member for Huron-Bruce, Mr. Gaunt, is being honoured. I regret many members of this House will be unable to attend. One reason might be that there is some pressure of business, but I suggest the other reason may be fear of the increased cost of travelling from Toronto to the community of Teeswater. I regret that. I just mention to the members that we will be travelling there to pay our good wishes to that honourable member.

Hon. Mr. Ashe: What a lame excuse.

Mr. Kerr: When is the tax going to take effect?

Mr. Elston: It seems to me that, no matter how one experiences this particular bill, there are many residents of this fair province who do not appreciate the ad valorem tax that is being added. The reason is that any time the price is increased by any outside force, whether it be the federal government, the government of Alberta or whatever, the tax itself will provide increased revenues and will charge the citizens of this province increased moneys to absorb the luxury of driving anywhere in this province.

If the government had provided us with some idea as to how those funds were to be designated, perhaps the people of Ontario would have borne the burden they are being asked to bear with a more determined and grateful attitude. I cannot believe the people feel happy about having to pay an increased tax that is going to fall into a general revenue fund to be earmarked for goodness only knows what.

The fact remains that the funds from this program, if they were to be earmarked for conservation, might well strike a sympathetic string in the hearts of many of the people of Ontario. They might be very happy if they saw some type of program being initiated from the funds that are being picked up by this tax.

However, there is no indication that is going to happen. If we look at the budget, we will see the Treasurer (Mr. F. S. Miller) felt he had to increase the taxes on gasoline as well as on diesel fuel, railway diesel fuel, aviation fuel, cigarettes, et cetera, because there was a diminished responsiveness of the revenue system.

I can only think that really means he felt the past costs that had been passed on to the various consumers of Ontario met with a conservation movement and caused a slowdown in the consumption of the various products that would provide the government with various amounts of revenue to offset its spiralling --

The Deputy Speaker: This ties in with the bill, does it?

Mr. Elston: It does, Mr. Speaker. I am just providing you with some rationale from the budget. I actually paraphrased from page 20 of the budget itself. Under the heading "Revenues From Fuel, Tobacco and Beverage Alcohol," it says: "I spoke earlier about my general concern with the diminished responsiveness of the revenue system. Consequently, I am proposing that the tax rates on gasoline, diesel fuel, railway diesel fuel, aviation fuel, on cigarettes," et cetera, will be raised. That has everything to do with what is happening.

I am saying that perhaps part of the reason this increased tax on gasoline occurred was that the people of Ontario responded to the increased costs from the federal and Alberta governments by conserving their transportation and by not consuming as many gasoline products.

If the increased taxes being taken from gasoline, diesel fuel, et cetera, were to be clearly earmarked for a conservation program, the people of this province would probably end up giving a sympathetic ear to the government of this province. That has not happened and it is too bad.

If they felt they were adding to the capabilities of this province to supply cheaper energy by having the government determine for the people of Ontario that revenues from the increased tax were being levied to purchase a new source of fuel or to provide an open channel by which people could obtain cheaper fuel, then I think they would bear this burden more graciously.

If that were the case, I could bear this type of bill more graciously myself, and it would give me some reason to rationalize this to the people of my riding.

However, we are not provided with any particular reason for levying this tax. There is no particular conservation program provided. There is no program set up whereby we are providing a better substitute for energy. We have no rationale other than the fact that the government is trying to keep its deficit down.

The net result of the whole budget, of which this gasoline bill is just one portion, is that the gross amount of the provincial deficit is going to increase. I find that unfortunate. It is going to increase by $997 million as predicted. Unfortunately, the government is harnessing a great portion of this year's deficit reduction on those individuals who are probably least able to afford it.

The Deputy Speaker: Excuse me, Mr. Elston. Mr. Laughren and Mr. Watson, you are carrying on a continual conversation. Mr. Elston is trying to make a couple of points on this bill that have not yet been made.

Mr. Laughren: It is the fault of the member for Chatham-Kent (Mr. Watson).

The Deputy Speaker: Carry on with the debate.

Mr. Elston: Thank you very much, Mr. Speaker.

I promise to be brief, but there are several things that I must point out to these various members who are not able to speak for themselves. I find that very difficult. In this province, we have a long tradition of being able to speak in this House for those people who are not able to come here in person and speak on their own behalf. I find the mandate extends not only from my riding but also from those ridings where the members are unable to get up. I will not point out those particular ridings at this time.

I want to point out one of the reasons I am so adamant. Perhaps some of the members feel I am feigning the protest I am launching against this bill. But that is not the case at all. These are real concerns that will determine the economic wellbeing of the riding of Huron-Bruce. In the areas of industry, manufacturing, agriculture and tourism, this bill will cause a very difficult stress to be placed on individuals who are already experiencing difficulties with high interest costs.

I want to bring to the attention of the members of this House one of the main concerns I have about this bill, which I just touched on briefly, and that is the fact that we had been led to believe there would not be any tax increases. It was suggested in our riding that there had not been any tax increases in the last year, that things would continue as they were and that there would not be any more tax increases to come.

Hon. Mr. Ashe: I never said that. Speak the truth.

Mr. Elston: That was inferred from various statements. Was the minister in our riding during the election? He was not.

As soon as the realities present themselves to us, we are saddled with what has been called a very bad budget.

I quote from an article printed not long ago in one of the local papers dealing with a statement made by one of the members of the governing party when he predicted at the time the budget was to be brought down that a difficult budget would be presented.

8:30 p.m.

Now that the realities have presented themselves, I find that we have been presented with this new budget and a new gasoline tax, which is bad for my riding and bad, I believe, for various segments of the industry of our province.

I also find that the posture that has been placed before us by this bill does not compare favourably with that of the government in 1979 and 1980. I regret that, because the people by and large had come to expect better things.

I also want to point out that, when 1979 rolled around and the Premier (Mr. Davis) and others presented themselves as champions of the consumers who were trying to keep the cost of gasoline in particular below those levels that were being suggested by others in the vast country of Canada, including the federal government and the government of Alberta, they led the charge to keep those prices low.

As the members will probably recall, the leader of the third party pointed out the various statistics and quoted several times from the Premier's speeches his support for keeping the prices low. That was, of course, when there was a minority government. After the situation had cleared itself and we got a majority government, we ended up with ad valorem taxes just like those in most of the other provinces in Canada; we added fuel to the fires of inflation, and we are causing ourselves great discomfort.

I regret that, and it is because of those things that I find myself rising here tonight. In fact, I asked that my party give me this opportunity to speak not only on behalf of the residents of my constituency but also in relation to the various industries that find themselves hard pressed by the increased costs that have come out of this particular matter. Mr. Speaker --

Hon. Mr. Ashe: Let's be realistic.

Mr. Martel: If it is so good, would you like to call an election on it now?

The Acting Speaker (Mr. Cousens): Order.

Mr. Elston: I thank the honourable members for their attentiveness, Mr. Speaker. I know some of those members who are unable to speak publicly here in the House will probably concur very widely with those comments that relate to the industry of agriculture in terms of increased costs.

I only regret that we are dealing with an ad valorem tax and that the government is now putting itself in a position where it will not have to come back to the people of Ontario when it wishes to increase the tax revenue. I believe the people of this province would be much better served if the government came back to them when it wished to increase the revenue instead of sneaking the increases in with those increases that are foisted on the people of this province by forces outside the province that we can no longer control.

I think the provincial government has a mandate to ensure that the people of this province are well served by the various policies. I regret that this particular policy, in my opinion, does not serve the people of this province well; in fact, it reflects very hard times to come for the various industries in my riding.

I urge all members not to support this ad valorem tax. Again, Mr. Speaker, I thank you for your indulgence and your support.

Mr. Grande: Mr. Speaker, I want to put on the record some of the comments I have been hearing around the riding of Oakwood regarding this innocuous bill that is before us tonight.

I want to say to the member for Chatham-Kent (Mr. Watson) that at least the previous member for that riding had flair. He is just there.

Mr. Watson: At least I am here. That's more than I can say for you most of the time.

Mr. Grande: Even though we were certainly in disagreement with the former member for Chatham-Kent, none the less I think he at least provided some theatrics in this House, if nothing else. But the honourable member who is sitting there has become petrified like the rest of those people in the back benches.

This particular bill affects the people he represents as well, and to think that he can sit back there day in and day out, without saying a word in terms of how --

Hon. Mr. Ashe: There are so many words over there that we just don't have time. Say something different instead of just putting in time.

Mr. Foulds: Get up and participate in the budget debate. You don't have the guts.

Mr. Martel: You don't want to be on the record as supporting it. It's great stuff.

The Acting Speaker: Order. Carry on, Mr. Grande.

Mr. Grande: Thank you, Mr. Speaker, I appreciate it. I do not know how the member can sit there without saying a word in terms of how this bill is going to affect the people he supposedly is here to represent. I thought this Legislature was the apex, if you like, of freedom in our society. I thought we were all free to get up and speak and to make the needs of our constituents known in this Legislature because, after all, that is what good representation ought to be all about.

I see those new back-benchers, those people in the back seats there, just sitting in here putting in time. The member for Chatham-Kent has put in a lot more time than those backbenchers, I grant him that, but the fact is, as I say, this affects the people in his riding as well.

Either he gets up and speaks in support of this bill -- nobody is saying that he should not support it, if he feels --

Hon. Mr. Ashe: I will, if I ever get enough time.

Mr. Grande: I understand that the member will. He has no option himself except to support it, as a matter of fact.

Hon. Mr. Ashe: No. I am going to set the record straight about some of the stuff that has been coming up.

The Acting Speaker: Carry on, Mr. Grande.

Mr. Grande: But I am talking about those newly elected members. They certainly have their fun in getting up, one at a time --

Mr. Kennedy: Fine bunch.

Mr. Martel: How do we know if they never speak?

Mr. Grande: Let me speak, guys. They certainly got up, one at a time, to speak on the throne speech.

Mr. Watson: Great speech.

Mr. Grande: The fact is that I congratulate them for getting up and speaking on the throne speech. Everybody in this Legislature should be heard if they have anything to say; that is true. In essence, it means he has nothing to say.

Hon. Mr. Ashe: You are like a pair of clowns. You go back and forth saying the same things over and over. You don't have anything different to say.

Mr. Wildman: Wait a minute. Did you call us clowns?

The Acting Speaker: Order, please. Mr. Grande, will you please talk to the bill?

Mr. Grande: I am, Mr. Speaker. I am.

8:40 p.m.

Last night, as the member for Lake Nipigon (Mr. Stokes) was talking in this Legislature, the member for Cochrane North (Mr. Piché) said: "I agree with everything you are saying. I think the people in my riding" -- -the inference was -- "are being taken by this legislation."

But what happens tonight? The Minister of Revenue (Mr. Ashe) happened to be in the Legislature last night, and the member for Cochrane North is not here tonight. Are the people in the Legislature now the ones the government can count on not to get up as the member for Cochrane North did last night, to say they disagree with what the member for Lake Nipigon was talking about? As other people have done, I invite those back-benchers to get up in the Legislature and speak.

Interjections.

The Acting Speaker: Order. Mr. Grande has the floor.

Mr. Grande: Mr. Speaker, if you want to call me by my name, that is fine; however, I would appreciate it immensely if you would please pronounce it properly.

The terrible thing about this bill before us is that it is an intelligent bill; the contents of this bill are cunning, astute, and devious. Rumour has it that the Treasurer (Mr. F. S. Miller) instructed his mandarins prior to the election to prepare three budgets: one in case of a minority government, one in case of a majority government and one in case the government was defeated.

In the budget of last year -- I am sure you have read it very carefully, Mr. Speaker -- the Treasurer said in the Legislature: "The citizens of Ontario are hard-working people. The support they give every day to developing the economy of their province is reflected in both our quality of life and our sound financial position. With controlled and modest growth and spending on the development of essential services, this government will ensure that maximum resources are left in the economy and that we do not contribute to inflation. Stability in our major tax rates is an essential part of the government's fiscal strategy. The dividend flowing from the sound fiscal management of the government of William G. Davis is that I can announce there will be no tax increases in 1980-81."

That was the election budget of that government. In essence, it said that no tax increases were needed in April 1980 for the fiscal year 1980-81. Then they come to the Legislature shortly after election day, March 19, when they got their coveted majority, and they heaped taxes upon taxes, $603 million worth. One would think a government should have known of $603 million worth of taxes 12 months prior to that.

If that is the kind of planning they do in this government, they might as well pack up shop. If this is the kind of planning, they have no sense of what is going on in this province. This bill represents nothing less than what has already been branded many times as a sock-it-to-them bill. I did say this bill is intelligent. I did say it is shrewd and vicious. As a matter of fact, it borders on perversion.

Hon. Mr. Sterling: Borders on what?

Mr. Grande: Perversion, my friend. Perversion.

Interjections.

The Acting Speaker: Order.

Mr. Grande: In essence, this bill is nothing other than the government of Ontario attempting to confuse people in this province. That is very true; it confuses people in this province. We have been talking about energy, energy supply, energy shortages and price increases for the last five years -- since 1975, as a matter of fact; it was even earlier than that, but at least I was not in this place before then.

What it says in essence is that the people out there in Ontario will be confused -- which of course I do not believe -- and they will say: "Price increases? Gasoline increases? It must be the federal government that is doing it." Others will say: "Price increases? It must be that bad Premier Lougheed; after all, he wants more and more money. Or it could be the oil cartel, the Organization of Petroleum Exporting Countries; that group is increasing the price of world crude, therefore it is the culprit. Or the federal government is the culprit; or Peter Lougheed is the culprit."

What happens is that the Ontario Tories will try to sneak in to benefit from that confusion. It is political strategy and many of them believe, falsely, that it will work.

Another point raised in the debate is that this particular bill is inflationary, that the government stands to profit from this bill through inflation. I do not think that is the essential point. Sure, the government intends to profit from inflation, but then which corporations in this province do not profit from inflation? The Conservatives will run the government like a corporation, therefore they are profiting from inflation.

8:5O p.m.

The sad part about this bill is not that the government profits from inflation but that the government has given up the fight to curb inflation. That is exactly what this bill means. In essence, they are saying: "We cannot beat inflation. There is nothing we can do to beat inflation. There is no creativity left in us to beat inflation, therefore we are going to give up."

They have abandoned that oft-repeated phrase from the Treasurer's budget, that the number one problem is inflation and we have to lick it one way or the other. In essence, they are saying inflation is here to stay and this government is incapable of doing anything about it. That is a tragedy, because when a government is not willing to fight a problem they themselves see, the economy is going to deteriorate.

Back in 1979 -- the Premier should remember -- we had a document called Oil Pricing and Security: A Policy Framework for Canada. This is a document the Premier went cap in hand with to Ottawa. He waved this and said, "This is the way we are going to have energy self-sufficiency in Canada." But the federal Tories -- or should we call them the failed Tories? -- just said: "There is no way. We cannot agree with you," because the federal Tories wanted desperately to agree with Peter Lougheed.

That, in essence, was the biggest ideological battle being fought in this country: Tories in Ontario fighting failed Tories in Ottawa fighting blue Tories in Alberta; that is the ideological battle that took place back in 1979.

Hon. Miss Stephenson: There is no such thing as a failed Tory.

Mr. Grande: Joe Clark would not agree with you.

Interjections.

The Acting Speaker: Carry on, Mr. Grande.

Mr. Grande: I want to quote something from this document. Let us not lose sight of the fact that this document was nothing less than the Premier's political strategy in this province. It was good political strategy, because it paid off. He wanted desperately to be seen as the knight in shining armour protecting the consumers and the unemployed. This document, as far as he was concerned, was going to do battle for him with Peter Lougheed and the federal government.

What this bill before us represents tonight is the failure of the Premier. That is exactly what it is. He failed to make his point with Peter Lougheed. Of course, nobody expected him to win against Peter Lougheed, who is a powerful man. Therefore, since he is a powerful man, one does not treat Peter Lougheed unkindly.

The problem is that the Premier failed to get his point across with the federal government of the day. Who listened to the Premier? Another politician who wanted desperately to show the federal Tories that the price of oil really does not have to increase as fast the Tories wanted it to increase. It was the beginning of a fantastic, mutually satisfying relationship between the Premier and Pierre Trudeau.

Pierre Trudeau accepted the blended price increase in here. But Pierre Trudeau had his own grand political strategy. He wanted to get back as the Prime Minister of Canada and the Premier was going to help him. That is exactly what happened. It is not so long ago in history that those back-benchers do not know what I am talking about.

What the Premier said in this document was that "unless an effective mechanism is found to respond to substantial shifts in regional income distribution without generating widespread demands for compensating increases in all incomes, then both more inflation and higher unemployment will result."

In other words, he was saying: "Hey, don't increase the price too high. Ontario is going to be suffering. There are going to be more people unemployed, and the consumers are going to be paying a lot more money." As a matter of fact, the estimate was that the average oil price increase would be in the range of $7 per barrel of crude. The federal government would get $1.3 billion, the producing provinces would get $3.08 billion and the petroleum industry would get $2.13 billion.

The Premier made his proposals. In essence, just to simplify it, he said: "What we need to do is to have a kitty. The whole of the country should have a kitty. In that kitty we should put the federal tax money from the oil, we should put in the money from Alberta and Saskatchewan and we should put in money from the oil companies. Because," he said, "unless the oil companies use the money to explore for new resources and new oil and new gas, they don't need that money. So," he said, "don't let the oil companies grab the money and don't let Alberta and Saskatchewan have the money."

In essence he said, "Ontario wants a piece of the pie." The federal government disagreed with him, and this bill represents that piece of the pie the Premier could not get from the federal government; so he is going to get it from the Ontario consumers.

As I said, this bill is devious for many reasons. The funny thing is that Pierre Trudeau took our Don Quixote in this province, our own Premier, for a ride, but now the Premier is taking the people of this province for a ride. I do not believe for one minute that the people of this province are going to forget the fact that the Premier is taking them for a ride or the fact that this bill represents a failure of the Premier and of the government to deliver in Ontario.

9 p.m.

No one in this House would have disagreed if the Premier had come in with a bill that said exactly the same thing as in 1979, "Don't let the oil companies grab the money"; or if he had brought in a bill to tax the money the oil companies would grab. However, that is not the case, because when the Premier spoke in 1979 his speech was purely and simply political strategy of the highest calibre. I congratulate him on that, but it was political strategy, not economic strategy.

When the back-benchers on the other side of the House talk about economic strategy, they have something to learn. The member for Algoma (Mr. Wildman) and the member for Nickel Belt (Mr. Laughren) could teach them some things if they would just listen for a while.

However, the government decided it was not the oil companies that should pay the prices because, after all, $12 billion in ripoffs by the oil companies was not enough. They should have more money in their pockets. Do not take any money from the poor oil companies. Do not take any money from those people who plead poverty all the time.

It is incredible how the government functions. What it said, in essence, was: "Hit the consumers, hit them hard; not once, by imposing a tax for one year, but four times a year." That takes ingenuity. It takes understanding and knowledge of how rich the Ontario consumers are.

After all, the government feels the consumers have a lot of money stacked up in their pockets and it has to take this money away from them. It knows how to deal with the consumers. It knows how to thank them. Now that the government has its coveted majority, I guess nothing can touch it. It is untouchable. It will do exactly as it pleases, when it pleases, and let the people pay.

I want to end these few minutes I have been on my feet by reading a letter, dated April 1 and signed by the Premier. On top it says "Confidential," and goes on:

"Dear Friends:

"I want to express my thanks for your vote of confidence on March 19. Personally I was elated because the world unfolded according to our plans. I want to share with you some good news. Frank, on May 19, will bring down the budget and, of course, in it you will find how the government will raise the $603 million it needs to stay in business this year. I will let you into a secret; however, please put this letter through your shredder once you have read it. I am sorry we could not figure out how we could do more for you. I hope next year will be better.

"Corporately yours, Bill Davis."

Mr. Conway: Mr. Speaker, that is a very interesting place to begin.

I rise to speak against and vote against this particular budget item, which has been characterized often and properly by members on this side of the aisle as an iniquitous and shameless revenue grab, a main plank in a budget that, in my view, was rightly characterized in the Kingston Whig-Standard of May 20 as "an appallingly useless budget for Ontario."

Other members have drawn to our attention those aspects of the May 19 budget speech of the Treasurer (Mr. F. S. Miller) that concern themselves most directly with this tax action. I want to dwell briefly on some of the remarks of the Treasurer in that particular portion of the budget speech. I found it interesting and somewhat contradictory that late in that speech he says, and I quote from page 17:

"As I mentioned before, the province's revenue needs are not being adequately met by our current tax structure. The inadequacy of revenues reflects to a considerable degree the many tax reductions implemented in recent years."

On page 20 he goes on to complain at greater length about his "general concern with the diminished responsiveness of the revenue system" -- a clear signal to all who listened to and later read this document.

I found those remarks rather contradictory in the light of the self-congratulation that forms the bottom of page three and the top of page four, in which the Treasurer says:

"The members will recall that on November 13, 1980, I introduced a $260-million package of supplementary actions to stimulate the Ontario economy.

"Foremost in the program were temporary retail sales tax cuts designed to impact selectively in specific sectors where economic performance was weak. The exemptions on purchases of major household appliances, new residential furniture and selected building materials, and a rebate of sales tax on purchases of new light trucks and vans, were all designed to boost sales and production in these important areas of our economy."

In one particular part of the budget statement we have the Treasurer complaining about the lack of responsiveness of the provincial revenues structure to current obligations. Some 15 pages earlier we have this same man bragging that during the course of a provincial by-election he undertook to reduce his revenues by approximately $250 million.

9:10 p.m.

It seems to me that we have here a contradiction between the Treasurer's actions of last November and this May and, indeed, his words at page three and his statements at pages 17 and 20.

Mr. Piché: Is this going to be long?

Mr. Conway: The gentleman who is the member for Cochrane North in all his expansive good humour had, it seems to me, ample opportunity to stand on his feet in his place and tell us with a greater degree of enthusiasm than has yet been his due exactly where he stands, positively or negatively, with respect to this budget. I await, like other honourable members, his intervention in this debate.

Mr. Roy: They are all gutless over there. Nobody stood up -- not one of them.

Mr. Treleaven: He was on his feet before the NDP member even sat down.

The Acting Speaker: Order.

Mr. Conway: I know as surely as I stand in my place here tonight in denouncing this particular measure that the people of Salford, Mount Elgin, Tillsonburg and Ingersoll agree with that assessment. They know how shameless and iniquitous a revenue grab this tax action is, and I certainly speak on their behalf as well as my own in pointing out this reality.

Much has been said about the reaction of the public at large as expressed in letters to members of the assembly about this action. Much has been said about the various impacts of this particular action on selected sectors of the Ontario community. I want tonight to share a selected sampling of the public press with respect to this budget item.

To begin with, and I know that distinguished ambassador of the fourth estate, the member for Cochrane North, will wish to listen to his colleagues in the publishers' den with respect to this budgetary item which occupies our time and our attention tonight.

My friend from Pickering is somewhat uncomfortable, it seems, with the march of parliamentary activity in this respect. Some of us recall articles in the public press some 15 or 18 months ago about how restless it was languishing on the government back benches in anticipation of the day when the member for Durham West (Mr. Ashe) would descend upon the Treasury bench. He is now there, and I am sure he will want to enjoy the full flavour of the parliamentary process and take it at full sail.

To return to my text, I know that my friend the member for Nickel Belt (Mr. Laughren) will want me quietly and dispassionately to review with you, Mr. Speaker, with him and with all honourable members, the editorial statements published in the national newspaper, the Globe and Mail, on Thursday, May 21, 1981, a portion of which editorial I will introduce into the record at this time.

The editorial bears the headline "Taxman at the Pumps," and it begins: "The Ontario budget totally undermines Premier William Davis's long-proclaimed campaign against rising prices for domestic oil. It puts Mr. Davis on the side of rising prices." It puts him and all his works and all his men on the side of rising prices. "Every time the price rises, for whatever reason" -- perhaps even for the contemplated purchase by this government or another of a Texaco-like oil company -- "his government will collect increased revenues."

The member, as a very careful reader of the public press, will know we were told just the other day that, as a result of the second stage in Mr. Lougheed's cutbacks of domestic production and by virtue of this iniquitous and shameless revenue grab, this government will profiteer to the extent -- if my memory serves me correctly -- of approximately an extra $13.4 million.

"Treasurer Frank Miller accomplished this by switching from a flat-rate tax on gasoline and diesel oil to a tax of 20 per cent of the retail price on gasoline and 27 per cent of the retail price on diesel fuel."

I regret the departure from this chamber of the new member for Simcoe East (Mr. McLean). While my good friend and colleague the member for Huron-Bruce (Mr. Elston) was addressing the subject, he did not seem even yet to understand or comprehend that this tax action did relate to diesel fuel.

"These taxes will be reviewed every three months and adjusted for increases." On that point -- and I noted that provision in the bill -- I have to think the very careful scrutiny of the Minister of Revenue will come to bear upon that provision to maximize its possibility.

The editorial goes on at some greater length to quote favourably, as it ought to have, my friend and colleague the member for London Centre (Mr. Peterson), who talks about the various negative aspects of this tax. In the interest of saving time --

Mr. Boudria: No. Tell us about it, Sean.

Mr. Conway: All right. "Mr. Peterson recognized that he was presenting the best case Ontario consumers could hope for. He allowed only for the already federally approved well-head price increases and federal taxes. There will inevitably be more," says no less an authority than the Toronto Globe and Mail, second only to the Brockville Recorder in prescience in so far as these matters are concerned.

"Mr. Miller is going to collect a tax on taxes as well as production costs. He was almost certainly modest when he said the new fuel taxes would increase Ontario revenues by only $135 million this tax year."

I suspect on that point the joy was almost orgasmic when the Treasurer and his staff sat in late evening session around Frost South to calculate just how much money this sly ad valorem tax would net to the Ontario Treasury. Then they came forth smiling and self-deprecatory, saying about $135 million for this year.

I suspect when we are finished, not only in this year but also in subsequent years, the reality of that action will be significantly more onerous for the already too-burdened consumers in this province.

9:20 p.m.

Mr. Piché: Will this be long, Sean?

Mr. Conway: I thought it was merely a case of dyspepsia that was bothering the member for Cochrane North.

"When Ottawa and Alberta," the editorial opined, "agree to an increase in the wellhead price of crude, all consumers, including Ontario consumers, will pay for it. Ontario consumers will also pay an additional 20 per cent of the increase into Mr. Miller's coffers.

"When the subsidy on foreign oil imports rises, all consumers, including Ontario consumers, will pay for it. Ontario consumers will also pay an additional 20 per cent of the increase into Mr. Miller's coffers.

"When Ottawa buys another foreign oil company for a grossly inflated price" -- or should Claire Hoy be correct and this government succeed a la Adam Beck in purchasing Texaco or some other company -- "all consumers, including Ontario consumers, will pay for it. Ontario consumers will also pay an additional 20 per cent of the increase into Mr. Miller's coffers."

You can see, Mr. Speaker, in your reasonable, straightforward, balanced, impartial sort of way, that the Treasurer's coffers are going to be enriched to a very considerable degree by this shameless and iniquitous revenue grab, which was described in the Kingston Whig-Standard editorial as part of "an appallingly useless budget for Ontario."

Alberta and Ottawa will get all the blame; Ontario will quietly collect an amount equal to 20 per cent of everything they are blamed for. And "quietly," ever so quietly, is the word for it; or rather, the words are "ad valorem."

"When Mr. Miller in his budget speech said," as the Globe and Mail editorialist quotes, "'I am proposing ... that the new ad valorem tax rate on gasoline be set to incorporate an average increase of about one cent per litre,' how many Ontarians interpreted it to mean that Mr. Miller was imposing a 20 per cent sales tax on gasoline, to be reviewed for increases every three months?"

My colleague and friend the member for Stormont, Dundas and Glengarry (Mr. Villeneuve) will recall, as will my colleague the member for Wellington South (Mr. Worton) and as will the member for York South (Mr. MacDonald) and perhaps a few others, the concern and the great anguish that characterized Les Frost when he came forward -- I think it was some time in the summer or early fall of 1961 -- with the first --

Mr. Worton: September. He predicted $65 million; now it is $2 billion.

Mr. Conway: September. I thank my colleague and friend from Guelph, the member for Wellington South, who will tell us later, to be sure, what Les Frost felt so concerned about in so far as the iniquitous aspects of a retail sales tax were concerned, and how, against his better judgement and the better judgement of the barber's chair in Lindsay, he none the less had to introduce that -- what was it? Can the member for Wellington South tell me?

Mr. Worton: Three per cent.

Mr. Conway: Three per cent. And it concerned that great man no end. That he left John Robarts to live with the realities of that tax action is not for me to comment upon now.

The Deputy Speaker: Good. Continue speaking to the principle of the bill.

Mr. Conway: But when you think about that tradition, Mr. Speaker, you as a very distinguished student of the arts of my Alma Mater, Queen's University, will know how concerned and how upset that great leader of Progressive Conservatism would be if he could stand in his place today and see a latter-day apostle, dare I say apostate, stand here and, in the name of ad valorem, blithely levy a 20 per cent retail sales tax on gasoline. I am sure that Les and the barber's chair in Lindsay turned a few revolutions when that news was carried to them.

"Bad faith," continues the editorialist, "are other words for it.

"Mr. Davis has given passionate support to Prime Minister Pierre Trudeau's campaign to hold down domestic wellhead prices for crude oil. He found Alberta's Premier Peter Lougheed greedy, though the Lougheed plan would promote Canadian oil supply security. But that was before what Mr. Davis called the 'realities of March 19,' when he recaptured his majority. Now he can go for the money.

"Greedy will no longer be the word: statesmanlike, when any Alberta increase pours money into the Ontario Treasury?"

I thought, sir, that particular editorial spoke rather directly and rather eloquently to what this particular tax action is all about. There is more, to be sure, because there might be some who would feel that the national newspaper, having taken the editorial view that it did during the recent campaign, might not be the most balanced place to look for an assessment of the immediate post-election budget.

Interjection.

Mr. Conway: I hear my good friend the member for Brantford (Mr. Gillies) say something I dare not repeat lest the full weight of parliamentary privilege be brought down upon me. But I noted in my post-budget survey of the provincial press that the member for Brantford said, "Well, it could have been worse." That is the best the honourable member, bright and ambitious and upwardly mobile as he surely is, could offer in defence of the budget: "It could have been worse."

But returning, as I was, to an assessment of the other press, there is I think an argument to be made for looking at the Toronto Star because, as honourable members opposite will know -- and if they do not, the Minister of Education (Miss Stephenson) might tell them -- that in the campaign just ended the Toronto Star, breaking with its tradition, supported the Progressive Conservative alternative in the government.

Hon. Mr. Ashe: When they looked at your side, they felt they didn't have a choice.

Mr. Roy: They are regretting that decision now.

Mr. Conway: Mr. Speaker, I know that you and my friend the member for Ottawa East (Mr. Roy) will want me to review quickly the post-budget assessment in the Toronto Star, supporter as it was of my friends the member for Armourdale (Mr. McCaffrey), the member for Sault Ste. Marie (Mr. Ramsay) and the member for Carleton East (Mr. MacQuarrie) in the recent contest.

The headline in that pro-government journal, in a phrase that recalls a famous day, was: "Budget: All Pain, No Gain." In my search for an editorial assessment of the budget, and this ad valorem measure in particular, I find this paper has some extremely interesting observations, some of which, in their essence, I would like to share with my indulgent friend the member for Durham West.

9:30 p.m.

Mr. Boudria: The member for Carleton East would like to hear about that too.

Mr. Conway: The member for Carleton East sits there quietly and eagerly, and he reminds me in a way of the current Minister of Revenue, because I was once privileged to see his performance on the local CTV affiliate on March 20. What he had to tell me and the thousands of others watching about his cabinet ambitions would wither your most sensitive ears, Mr. Speaker. It reminded me of the plaintive cries of the member for Durham West some months ago.

This editorial, dated Wednesday, May 20, and headed "Budget: All Pain, No Gain," begins: "What's most distressing about the budget Ontario Treasurer Frank Miller unveiled last night isn't the whopping tax increases. It's that those painful increases are being imposed in the service of no discernible good cause..."

No discernible good cause. I am sure the Minister without Portfolio, the member for Armourdale (Mr. McCaffrey), to whom I will happily return some moments from now, will be reminded by that of an editorial assessment of the same budget in the Financial Post a couple of weeks ago, which said that as far as fiscal policy was concerned a statement by General Motors of Canada has a greater impact than the provincial budgets of the Premier and the Treasurer.

The Toronto Star editorial agrees with that assessment obviously. It goes on: "...and that they are likely to confer little or no broad economic benefit on the people of this province." It is very difficult to get that out, because it is so unsettling to those of us looking at these pro-government journals and remembering the provincial election to see within a few short weeks an editorialist say "those painful increases are being imposed in the service of no discernible cause" for Kemptville, High Park or anywhere in between and that "they are likely to confer little or no broad economic benefit on the people of this province."

Mr. Boudria: What does it do for Timmins?

Hon. Mr. Pope: More than you will.

Mr. Conway: I caution my friend the member for Prescott-Russell not to exacerbate the tender sensibilities of the new Minister of Natural Resources, who has been almost like the Minister of Education in her earlier incarnation, a veritable Vesuvius of bad temper. One ought not, without total consideration, bring a Mount St. Helens of anguish down upon --

The Deputy Speaker: This has to do with the bill, does it? Try to connect the Minister of Natural Resources with this bill.

Mr. Conway: I was trying in your interests, sir, to restrain the new member, a good and solid member, as my friend the member Prescott-Russell is, from slighting unduly the member for Cochrane South.

The Deputy Speaker: Thank you for looking after my interests. Continue with the debate.

Mr. Conway: Speaking to the very essence of this legislation, this --

Hon. Miss Stephenson: Are you teething or having growing pains?

Hon. Mr. Pope: Get it out of your system, cry-baby.

Hon. Miss Stephenson: One of these days he will grow up, I think.

Mr. Conway: I wondered how long it would take, but it has not taken me too long at all. It is good to have the Minister of Education back.

In this editorial, it says: "Miller's new approach to taxing gasoline sales is an entirely different matter: It's unjustified and highly objectionable." If that does not agitate the Pearsonian bow tie of the new member for Cambridge (Mr. Barlow), I do not know what will. "It's unjustified and highly objectionable," says no less an oracle than the Toronto Star.

"By moving from a fixed rate to a percentage of the sale price at the pump, the Ontario government will reach deeper into the consumer's wallet every time prices go up. That's inflationary." It seems sensible to me, and I am sure the calm look of agreement on the new superminister, the Provincial Secretary for Resources Development (Mr. Ramsay), indicates an accession as well to that point of view.

"Pushing up the retail cost of gasoline will only compound the cost-of-living pressures already generated by rising energy prices. It's socially cruel."

Sucked into the vortex of the promise of Ontario as it was but weeks earlier, the Toronto Star says the day after the budget, incredibly, that this government, just elected, has dished up a budget that is objectionable, totally unjustifiable and socially cruel. It makes me think the ghost of Joe Atkinson is back in the editor's chair writing with the kind of sensitivity that gave that paper the kind of credibility it has so often enjoyed.

This ad valorem tax "will add to the burden of low- and middle-income earners already hit hard by inexorably rising fuel costs." This budgetary assessment gets worse. Keeping in mind we have already heard this journal pronounce it is all those other things, it also says it is hypocritical. It is not only socially cruel, objectionable and unjustifiable, but it is also hypocritical.

Mr. Roy: That is not us saying that, is it? That is the Star?

Mr. Conway: That is the Star, and I did not trouble myself to get their editorials of support endorsing the ebullient new member for St. George (Ms. Fish) and many others in the recent campaign. But I am really struck by the words of condemnation, the expressions of censure that this editorial reveals. This government is hypocritical, it says. The implication of that must surely be that this is a hypocritical bunch.

That is not I, sir. Not even in my wildest partisan humour would I say such things about the new member for Lincoln (Mr. Andrewes) and the old member for Ottawa South (Mr. Bennett), the new Minister of Natural Resources or whoever. That is their friend the Toronto Star pronouncing upon their works post election.

Mr. Roy: You are darned near embarrassed to quote them.

Mr. Conway: I am. It hurts me to have to point these things out.

"The Davis government has rightly been pressing Ottawa not to allow energy prices to increase any more than absolutely necessary -- and now it's raising the cost of gasoline itself, to boost provincial revenues."

Hon. Mr. Timbrell: Is this the same as your last speech? Have they passed the plate yet?

The Deputy Speaker: Carry on with the debate, Mr. Conway.

9:40 p.m.

Mr. Conway: The imperial potentate, the member for Don Mills, inspires me to repeat some of this. If he wishes me to quietly go through the various --

Hon. Mr. Timbrell: I missed the first part.

Mr. Conway: We will see. "As for the whopping hike in income taxes..." I will not go on. But those are serious words of condemnation and censure. It is not just a group of carping, nay-saying opposition politicians who are being animated to this kind of criticism but, as I said, no less a journal than one that weeks earlier endorsed this particular promissory note in the campaign and I fear perhaps might do so again.

But let us look at other assessments of the Toronto Star. They have a distinguished economic analyst at the Toronto Star called Mr. David Crane.

Hon. Miss Stephenson: Perhaps this is what we need.

Mr. Conway: It may be so. I will be happy to defer at the high altar of omniscience that is the Minister of Education.

Hon. Miss Stephenson: Thank you very much. That's very flattering. I appreciate that.

Mr. Conway: We Catholics were reared on the concept that only the Pope was infallible but, having arrived here six years ago sitting opposite the member for York Mills, I have to come to qualify that concept of infallibility in at least one other case.

As I said earlier, Mr. Speaker, there are others --

Mr. Newman: One at a time.

Mr. Conway: My friend the member for Windsor-Walkerville (Mr. Newman) enjoins me to take one at a time, and I always like to take one at a time.

Mr. David Crane, commenting on the Ontario budget in the --

Hon. Mr. Timbrell: Were you at the chiropractors' dinner?

Mr. Conway: Proudly, I was not, sir.

Interjections.

Mr. Roy: Who made the phone call, Claude? Just tell us who made the phone call.

Hon. Mr. Bennett: You did.

The Deputy Speaker: That can be reserved, Mr. Roy, for next question period.

Mr. Roy: Send the Speaker to give out the cheques then. Who made the call?

The Deputy Speaker: Mr. Roy, I have news for you: I am making the call here.

Mr. Conway, please.

Interjection.

Mr. Conway: Thank you very much, Mr. Speaker. If it makes the member for Chatham-Kent (Mr. Watson) feel any better, in the words of the old song, "It's only just begun." He might ask, quite rightly, why I sat quietly in my place a week or so ago when my leader tried to bring this House around to an emergency debate on this subject --

The Deputy Speaker: And you were thinking about speaking to this bill.

Mr. Conway: Exactly. We were told by the government House leader, and in that case I thought he was quite right, that we have this debate to express at length our views on the issue of ad valorem. I am only doing what the government House leader has asked me to do.

Mr. David Crane, writing in the Toronto Star of Wednesday, May 20, says among other things in respect of the budget --

Hon. Mr. Bennett: This is impossible.

Mr. Conway: The Minister of Housing almost incites me to bring out of my desk some famous photographs from the Ottawa Citizen, and not even I would want to remind the minister of that soirée of Jean Piggott, the Premier and the minister about a year ago. It is better for my good friend that I am reciting from this and not reviewing some of his pictorial splendour in our national capital press.

Hon. Mr. Bennett: The Citizen is your favourite newspaper.

Mr. Roy: Who made the phone call? Just tell us.

Mr. Piché: I made the call!

The Deputy Speaker: Order, please. Mr. Conway has a very important point to make on this bill.

Hon. Mr. Ashe: Not likely. Don't give him credit for something that isn't there.

Mr. Roy: The minister is confusing --

The Deputy Speaker: Mr. Roy, please let your colleague continue.

Mr. Conway: The very distinguished economic reporter for the Toronto Star, Mr. David Crane, reporting on Thursday, May 21, says about this particular tax action:

"The new tax system has another controversial effect as well: It undermines the credibility of Premier William Davis's opposition to rising oil prices." He says it undermines the credibility of the Premier of Ontario in the debate about oil pricing arrangements in this country.

"Davis has always maintained that oil prices should not be allowed to rise too swiftly because of the harmful impact this will have on consumers.

"But as a result of Miller's budget, every oil price increase instigated by Ontario or Alberta will be followed by an additional price increase for Ontario residents resulting from Ontario's own tax.

"It is hard to see how Davis can have credibility the next time he meets Alberta Premier Peter Lougheed to express his concern about rising oil prices."

Mr. Grande: In public or private?

Mr. Conway: Perhaps both. "The more oil prices go up, the more money Ontario now stands to grab" -- that is the right word, the appropriate verb -- "in taxes as well.

"Under the old system, if the provincial government wanted more money from gasoline, cigarettes, beer and the like, the provincial Treasurer would have to increase taxes in his budget. For example, in Miller's first budget in 1979 he raised the gasoline tax from 4.2 cents to 4.6 cents a litre and the cigarette tax from 22 cents to 24 cents a package.

"Chances are the provincial tax collectors also hope the public will forget that Ontario is a silent partner whenever oil prices rise -- and will focus their anger on Alberta and the oil industry instead."

I thought the very distinguished and knowledgeable Mr. David Crane coined a very appropriate phrase for this particular tax action. Remembering where the phrase originated, at least for most of us, I thought the phrase "the silent partner" was an eloquent testament to what this ad valorem business is all about. It has made the Ontario government the silent partner in the ever-escalating oil price situation. To repeat, it is nothing more and nothing less than a shameless, iniquitous revenue grab.

Mr. Crane goes on: "The other concern that some economists have is that by making inflation worse through its new tax system" -- this ad valorem system -- "Ontario will also contribute to inflation in other ways as well. By pushing up the cost of trucking and air and rail travel, for example, Ontario may also force those industries to raise their prices more than they might otherwise do."

9:50 p.m.

I have heard and I have read what concerned Conservatives such as the member for Cochrane North have had to say in days past about the very serious ongoing requirements to keep down those inflationary pressures that seem to be everywhere in those areas, particularly transport, in northern Ontario. I would like to believe that member after member -- from Cochrane North to Cochrane South, to Fort William (Mr. Hennessy), to Kenora (Mr. Bernier) and beyond in the north -- these honourable men and women, would want to stand in their places and speak with that kind of enthusiasm that was once so central a part of their political action.

Who among us can forget the young and enthusiastic member for Cochrane South, fresh from his victory of four years ago to this very night, coming down here -- and what was he not going to do; what was he not going to do about the cost of northern transport?

Mr. Laughren: He is minister without a food terminal.

Mr. Conway: As my friend the member for Nickel Belt has pointed out, we thought for a while he was going to be the minister of a food terminal. He became Minister without Portfolio and minister without a food terminal.

I remember that member when he was the cutting edge of an aggressive new Toryism from the north, followed not too many years after by the very distinguished member for Sault Ste. Marie, who might remember those speeches the member for Cochrane South used to give about Star Transport. I will tell the House that like a couple of the famous speeches of the member for Prince Edward-Lennox (Mr. J. A. Taylor), they were memorable.

I agreed with the member because I, like the member for Cochrane South, know very keenly about the very inflationary pressures that are out there in the marketplace for the people in the north and in the east, people who are trying to do business in spite of these very significant transport cost increases. I agreed with the member for Cochrane South three or four years ago in his earlier, in his happier, in his more straightforward incarnation.

I wonder, privately and quietly, where have all the flowers of that new Tory hope gone? They have gone to the cabinet bench or to some government agency, board or commission, or some place in between. I have listened over many hours, over six or seven days now, and I have waited for members from the north and members from the Tory caucus in the rural southwest to stand in their places and speak to at least a cautious concern about this kind of tax action, or to stand firmly in their hopeful posture, awaiting the cabinet call, and defend this tax action in all its glory.

So what am I to make of the stunning continued silence that decorates the government bench? Maybe after hours tonight my friend the member for Ottawa East and others can educate me on this monkish, almost Trappist silence across the way.

To be sure, as the very distinguished and the very knowledgeable Mr. David Crane goes on in his analysis of May 21 in the Toronto Star --

Hon. Mr. Bennett: I thought you felt it was a terrible paper.

Mr. Conway: I thought the Toronto Star was terrible? My good friend the member for Ottawa South knows that I would never say the Toronto Star was a terrible, terrible paper. In fact, I believe it is quite the contrary. It has erred in recent days but, apart from the Minister of Education, that kind of ever-present wisdom and unfailing accuracy is not something to which even so distinguished a member of the fourth estate as the Toronto Star would lay claim.

To go on: "To be sure, Ontario already benefits from inflation through its retail sales tax. When the price of a car goes up, Ontario collects more tax dollars and adds to the ultimate cost of a car. But the retail sales tax is just seven per cent." Memories of my concern for the good old Tory days of former Premier Leslie Frost. The new --

Hon. Miss Stephenson: You really do suffer from etymological steatorrhea.

Mr. Conway: I am almost tempted to put in the record a marvellous quote that my doctor friends --

The Deputy Speaker: I know, but you won't, because you are speaking to the bill.

Mr. Conway: -- gave me about the presidential address, I think to the Ontario Medical Association, of the then president and now Minister of Education, a phrase I believe she used to describe what they were getting from the Ontario government. I should check my records. Some day I will, and maybe I will retroactively reintroduce that beautiful, if somewhat indelicate phrase to describe what happened to the Ontario consumer in so far as this ad valorem tax is concerned.

To continue: "But the retail sales tax is just seven per cent. The new tax rate on gasoline is 20 per cent, on cigarettes 36 per cent, on beer 20 per cent and on cigars 45 per cent."

Interjections.

Mr. Conway: Well, no. I am about to recite John Milton's Areopagitica but that might take us a little longer than we would like to be kept.

Interjections.

Mr. Watson: Are you opposed to temperance?

Mr. Conway: Am I opposed to temperance? Listen, I have grown up in the shadow of the member for Renfrew South (Mr. Yakabuski) and I am a very temperate man. It would be difficult to be otherwise --

Interjection.

Mr. Conway: Will the minister please stop provoking me, or I am going to say something unparliamentary and I don't want to do that.

Hon. Mr. Timbrell: Why not? You have been saying everything else.

Interjections.

The Deputy Speaker: Would the Minister of Health refrain slightly and let Mr. "Seen" Conway continue.

Mr. Conway: At least he is not yet calling me obscene and for that I --

Interjections.

The Deputy Speaker: Order, please. Mr. Conway has the floor. Let's continue. It has been a long evening.

Mr. Conway: Thank you, Mr. Speaker.

Mr. Crane says: "Thus the tax increase for these everyday items will be much bigger than it is for everyday items such as cosmetics and candy bars covered by the seven per cent retail sales tax."

I think that is a very important comment on Tory economics, proving to me that the kind of philosophy we remember from iron-heeled former Prime Minister R. B. Bennett rides very well today in this kind of budget, when they are prepared to levy a 20 per cent ad valorem rate on these important essentials such as gasoline and a much lesser rate on other things that for many would be considered less essential.

There is another concern as well. I know the member for Sarnia (Mr. Brandt), serious man as he is, will want to hear this.

Interjections.

The Deputy Speaker: Please avoid the interjections and continue, Mr. Conway. Never mind the interjections. Continue with the bill.

10 p.m.

Mr. Conway: Mr. Crane has another concern as well: "Seeking an inflation dividend for the Treasury on items that directly affect the pocketbooks of students, ordinary workers, and senior citizens is regressive." To that I would add punitive and totally uncalled for. While people with big incomes will not notice the higher taxes, the average citizen of Pembroke, South Ottawa and many other places -- that average citizen in Flower Station, in Killaloe, in Carleton Place, in Iroquois Falls, Oxford Mills, Brighton, Port Hope, Rockton, Sterling, Faraday Mines, in a lot of places -- Dover township, Moonbeam, Athens, Kilbride, Tillsonburg --

Interjections.

Mr. Speaker: Order. Continue, Mr. Conway.

Mr. Conway: It was marvellous hospitality tonight, Mr. Speaker. I want to thank you for so generous a banquet as we enjoyed; it inspired me.

Interjections.

Mr. Conway: They are provoking me again. They are going to make me observe that I have returned from the banquet table of the Speaker in a somewhat more upright position than my good friend the member for Kingston and the Islands (Mr. Norton). They should not provoke me; I don't want to be provoked.

Mr. Speaker: I can vouch otherwise. Keep going.

Interjections.

Mr. Speaker: Return to the principle of the bill, please.

Mr. Conway: To continue: "While people with big incomes" -- and might I parenthetically add, and bigger limousines -- "will not notice the higher taxes, the average citizen will have to dig a bit deeper into his pocket to deal with this ad valorem gas tax proposed in Bill 72. If Miller had been concerned about fairness, he could have raised his additional money by closing tax loopholes and basing his new revenue sources on ability to pay. But with oil prices slated to at least double over the next five years, Miller must have found the prospects of soaring tax revenues irresistible."

Stealing something from the vernacular of my friends on the left, Mr. David Crane, the distinguished and knowledgeable analyst for the Toronto Star, concludes this assessment of this budgetary item with the following: "Move over Sheikh Lougheed; make way for Sheikh Miller. Ontario may not have any oil but it does have the power to tax." Move over, we're coming through, and we're going to sit and we're going to squeeze out of every one of these additional increases our ad valorem rate.

That is Mr. David Crane writing in the Toronto Star of Thursday, May 21, 1981.

There are other periodicals. There are other parts of the public press in this Queen City that have a more traditional, a more close, sometimes a more partisan relationship with this government. It is to that journal, that tabloid that I will now turn my attention and yours, sir, for comments that speak, I think, to some of the issues raised in Bill 72 -- the gasoline tax, the ad valorem silent partner.

Mr. Treleaven: Oh, the London Free Press?

Mr. Conway: The London Free Press had a headline. I recall it well. "Tax Hurricane Sweeps out of Queen's Park. Tax Hurricane Sweeps Across the Rural Southwest as the" --

Mr. Treleaven: Anyone can read the headlines.

Mr. Conway: I was invited to comment on the post-budget press in London. That is the headline I read. But reading from the business column of the Toronto Sun on Tuesday, May 26, over the byline of Mr. John Belanger the headline was, "Save Us' Davis Betrays Us."

Mr. Bradley: No, not the Toronto Sun. I do not believe it.

Mr. Conway: No less a journal than the Toronto Sun saying, "Save us' Davis betrays us."

Mr. Bradley: It has a nice ring to it.

Mr. Conway: It has a kind of litany-like ring, as the member for Scarborough Centre (Mr. Drea) will surely know.

I am going to quote a few random sentences from this particular item.

Mr. Speaker: Rather than quoting, maybe we should return to the bill.

Mr. Conway: I think this is a very important matter, and I have tried, Mr. Speaker, very carefully, painfully, assiduously, to focus my attention and yours, sir, on the ad valorem tax that is proposed in this budget and carried forward in Bill 72. It says: "As that Sun editorial" -- which I am not going to quote -- "points out, indexed taxation is the new provincial wrinkle that deserves," says Mr. John Belanger, writing in the Toronto Sun on Tuesday, May 26, "more attention. It's an inflationary factor, of course, which simply means more inflation has been automatically built into the economy."

10:10 p.m.

Mr. Cunningham: On a point of order, Mr. Speaker: The member for Armourdale (Mr. McCaffrey) is putting money into his pocket. I saw him. I want an audit.

Mr. Conway: This built-in inflation is "from a government that allegedly stands firm against inflation," says the Sun.

Interjections.

Mr. Speaker: Order.

Mr. Conway: There are a lot of people over there who should have 30 pieces of silver ready at hand to contribute.

To continue: "What the government of Ontario said on Tuesday night is that it has just joined the government of Canada in its woeful admission that it has given up the ghost on the most serious concern facing us today. Like another quite famous public servant before him" --

Interjections.

Mr. Cunningham: On a point of order: It started with 65 cents and ended up with 35. I think we should have an audit.

Mr. Conway: When I started this little speech moments ago, I never expected such help, in all respects, from my friends opposite, but they are being very helpful.

Hon. Mr. Timbrell: We have passed the plate. When are you going to give communion?

Mr. Conway: I quote, "Like another quite famous public servant before him, Premier William Davis merely washed his hands of the matter." That analogy is not used at all loosely.

Mr. Roy: What are you quoting from?

Mr. Conway: I am quoting from Mr. John Belanger of the Toronto Sun, who adds, for the edification of my friend from Ottawa East, about the ad valorem principle -- the business columnist of no less a newspaper than the Toronto Sun says, "Like all true cowards, Mr. Davis would rather hide behind the shroud of indexing than take his lumps (however well deserved) in a political forum."

I wish my friend the member for Muskoka (Mr. F. S. Miller) were here tonight, at least for this particular portion of my remarks. The Sun says the Premier (Mr. Davis) "is to blame for this budget." I want my friend the member for Mississauga South (Mr. Kennedy) to convey privately to the Treasurer that, according to the Toronto Sun -- lest these rather hard-hearted, sometimes acrimonious condemnations worry the Treasurer too much -- the Premier is to blame for this budget with all its heinous ad valorem tax gouging.

Interjections.

Mr. Conway: I am only about a quarter of the way through.

Interjections.

Mr. Speaker: Order.

Mr. Conway: Let the record show that the Treasurer and the Minister of the Environment (Mr. Norton) just proudly walked into this chamber together.

Interjections.

Mr. Speaker: Perhaps the honourable member could get back and start quoting from Bill 72 now.

Mr. Conway: The Premier is to blame for this budget with its indexed taxation, the centrepiece of Bill 72. The Premier is responsible for this budget -- "Make no mistake about that," says the Sun. And with shades of what we have seen of the relationship between the parliamentary secretary to the Minister of Agriculture and Food (Mr. McNeil) and the minister (Mr. Henderson), Mr. John Belanger says: "Make no mistake about that. Miller is only the messenger boy; the carrier pigeon."

Interjections.

Mr. Speaker: Continue, Mr. Conway.

Hon. F. S. Miller: I am no carrier pigeon. I may be a sitting duck, but I am no carrier pigeon.

Mr. Conway: The Treasurer's argument is not with me; it is with the very distinguished and sometimes outspoken financial correspondent for the Toronto Sun, Mr. John Belanger, who has associated him with that particular group.

He goes on and concludes this assessment of the principle of indexed taxation, which is the centrepiece of Bill 72 --

Mr. Piché: Stop quoting from Pravda.

Interjections.

Mr. Conway: Not even I would touch that with a Kapuskasing pole.

"I used to think William Grenville Davis had honour, dignity, honesty, integrity and, most of all, courage. No more," says the Toronto Sun, "because for Canada's economic heart and spine to move to indexing is, more than anything else, cowardly. And I never thought I would see the day when I called him, publicly or privately, a coward. But he is. In spades, or something." I quote from the financial correspondent of no less an oracle than the Toronto Sun.

Interjections.

Mr. Conway: There might be some -- the Minister of Health, the Ministers without Portfolio, the honourable member, the very active member in terms of political mobility for St. George (Ms. Fish) -- who have a feeling that I have picked selectively from a partisan press.

10:20 p.m.

Mr. Bradley: She is a reformer. The Toronto Star said she is a reformer.

Mr. Conway: The Star calls her a reformer. Let the record show that not even the member for Renfrew South and the member for Fort William, in their most joyful moments, applauded an action as the reformer for St. George applauded this tax and its messengers.

Mr. Bradley: What would David Crombie think?

Mr. Conway: What would David Crombie think? He would think perhaps -- let me go on, sir.

Mr. Speaker: Please do.

Interjections.

Mr. Speaker: Order. Continue, Mr. Conway.

Interjections.

Mr. Speaker: Now if we can all listen with rapt attention, Mr. Conway has the floor.

Mr. Conway: It will take me some further time to develop the second, third, fourth and fifth parts of this address, but I do believe I can conclude the first section by adjournment time, seven minutes from now.

Hon. Mr. Pope: Are you kidding?

Mr. Roy: Take your time.

Mr. Conway: Writing in his regular space on June 2, Mr. Claire Hoy, the Queen's Park columnist for the Toronto Sun, opined in a column headlined, "Benedict Arnold of the Oil Set," about how iniquitous, reprehensible and shamefaced a revenue grab is the ad valorem gas tax as proposed in Bill 72.

Mr. Claire Hoy writing in his space of that day in that paper said: "Remember the 'good olde days'? No, silly, not the real good olde days of the 1920s. I mean those hazy, crazy, lazy days of 1979 when Metro motorists paid about 87 cents a gallon for gas, about half what the price will be when Peter Lougheed's latest piece of economic blackmail is passed along.

"Still, Lougheed has been consistent. Alberta's ayatollah has always been out to stiff Ontario and turning the taps off is just his latest ploy. Ottawa, too, has been consistent, even during the Tory aberration after the 1979 election. Like Lougheed, they've been doing everything possible to squeeze consumers in return for swelling their own coffers.

"What is different, besides the price, is Ontario's position in this scheme of things. Until now," -- until Bill 72, until the ad valorem indexation of the gasoline tax -- "Billy Davis was single-handedly fighting for the consumer interest, and, what's more, being taken seriously by oil barons and their friends. Davis said oil interests, private and public, were already making a fortune from oil at our expense, so artificially higher prices would kill Ontario's manufacturing base. It's inflationary, he cried, an 'unprecedented raid' on consumers. In short, Davis didn't like higher oil prices," of the kind being talked of in Perth, Sault Ste. Marie or anywhere else in Ontario or Canada.

As my friend the member for Sarnia will want to know, that was in 1979 when he was probably still a Liberal. He had already changed, lost once and was geared up for --

Interjections.

Mr. Conway: Mr. Hoy wrote: "Now we rush you forward to 1981, just two weeks after Davis and Treasurer Frank Miller conspired to surrender and join the oil profiteers. Now, rather than hurt as the price goes up, Davis and Miller win. The Ontario motorist, alas, loses. But what the heck? These are, says Miller, 'inflationary times.' Davis and Miller obviously wanted to get in on a good thing."

Let me say Bill 72, with its 20 per cent ad valorem rate, is a very good thing from the point of view of their revenue requirements. On pages 17 and 20 the Treasurer barefacedly admits this is his ambition, and not something else, as the government whip, the distinguished member for Mississauga East (Mr. Gregory), would have had us believe the other night in an interjection, "But isn't it a good thing for conservation?" There is no mention in those salient passages of the budget about this tax action as doing something in the interest of conservation; not at all. It is purely a shameless and barefaced revenue grab.

Writing in his space in the Toronto Sun of June 2, Mr. Claire Hoy continued: "Now, rather than a set rate per gallon, we have what's called an ad valorem tax, which means a straight percentage of the price. As the price goes up, so does Ontario's take, just like Ottawa and Alberta."

Coming back to David Crane's great phrase, "the silent partner in this iniquity," it is so iniquitous I wondered if a cigar did not get lodged immovably in the mouth of the parliamentary assistant to the Ministry of Northern Affairs when he heard of this heinous, anti-consumer attack on the driving public of Fort William, so terrible an action is this proposal.

Mr. Speaker: Is the honourable member at a convenient spot to terminate?

Mr. Conway: It is a convenient opportunity to avail myself of this moment to ask that we adjourn the debate until another time at which point I shall happily and at some length continue apace.

On motion by Mr. Conway, the debate was adjourned.

ANSWERS TO QUESTIONS ON NOTICE PAPER

Hon. Mr. Wells: Mr. Speaker, I wish to table a supplementary answer to question 96 and the answer to question 98 standing on the Notice Paper. See Hansard for Friday, June 12.

The House adjourned at 10:30 p.m.